Armenian Tycoon To Invest In Stagnant Chemical Giant

Hrant Vartanian, a prominent Armenian businessman, promised on Wednesday to invest heavily into a sprawling chemical complex in the northern city of Vanadzor which has stood idle for much of the past decade.

The two Soviet-era chemical plans and a thermal power plant connected to them had been privatized in 1999 by Armenian-born Russian businessman Senik Gevorgian whose Prometey-Khimprom company pledged to create 4,000 jobs and invest $55 million there within a short period of time. However, the plan ran into trouble by 2002, leading Gevorgian to sell a 50 percent share in the complex to the British-registered group Ransat.

The deal raised fresh hopes for the revival of the chemical giant that used to be the city’s single largest employer. But they faded quickly after Ransat, which also managed another troubled chemical factory in Yerevan, quit Armenia earlier this year following a bitter dispute with its government.

Vartanian announced that his Grand Holding and Prometey-Khimprom have jointly drawn up a rescue plan envisaging millions of dollars worth of investments in the Vanadzor complex. He did not specify their precise amount though, saying only that the two industrial groups will share future profits. He said the chemical plants will be gradually reactivated within a year thanks to a new technology and much cheaper Russian natural gas, their main raw material.

Its existing price, $79 per 1,000 cubic meter, has proved too costly for Prometey-Khimprom. Gevorgian’s attempts to secure the vital gas deliveries at a discount price were unsuccessful in the past. The Moscow-based entrepreneur, according to Vartanian, has recently reached an agreement with Russian gas suppliers which will allow him to buy the fuel the Vanadzor factories for only $35 per cubic meter.

The business project will be Vartanian’s first foray into Armenia’s chemical industry which has seen a steep decline since the Soviet collapse. His Grand Holding has so far mainly specialized in the manufacturing of cigarettes, candies and electrical lamps.